The article talks about the tips on streamlining the journal entry testing post-analysis.
How does this add value to your audit?
MindBridge analyzes 100% of the general ledger data and applies a risk score to each transaction.
If you are testing a sample of journal entries, you can use MindBridge to stratify your sample selections towards entries or transactions flagged as either High or Medium risk (i.e., those transactions that have failed multiple control point tests). This truly allows you to focus on transactions that exhibit multiple characteristics of an anomalous transaction, which increases the likelihood that it is potentially anomalous. You can then add these sample selections to your audit plan and export an Excel sheet that summarizes the transaction details along with exactly which control points were triggered.
On the Risk overview tab, the results of each control point test are summarized as counts, allowing you to drill into and scan the types of transactions that are being flagged. Using the Filter Builder, you are able to further query the subset of transactions.
For example, isolate only those transactions that were posted within 60 days of balance sheet date that hit a particular control point.
If you choose to import an Opening Balance and Closing Balance to your analysis, balance checks ensure that the population of general ledger entries is complete. This saves you valuable time!
Use case example
MindBridge AI empowers users by analyzing the general ledger data and applying a risk score to each transaction. Having this dimension of risk at the transaction level can dramatically streamline journal entry testing to focus on entries which have failed multiple control point tests as potentially indicative of error or management override of controls. Some examples of key features with respect to journal entry testing are outlined below.
When uploading an opening balance and closing balance to your analysis, the balance checks function under the Reports tab will ensure that the population of general ledger entries is complete and will also reconcile the activity at the level of each general ledger account for the whole year.
The reports are available for export and shows exactly which accounts are out of balance, should there be any. This saves a great deal of manual work if this exercise is currently being done in Excel on the engagement and ensures that before testing begins, you're working with a complete sample of journal entries.
Depending on your audit methodology, some auditors may choose to test 100% of the high-risk transactions as part of their journal entry testing approach. Drill through with one click and add these sample selections to the audit plan immediately.
On the right-hand side of the Risk Overview tab, the results of each control point tests on the full general ledger are summarized. Clicking on any of them allows you to drill into and scan the types of transactions which are being triggered in each test.
For example, further investigation on any transaction flow that trigger the control point Flow Analysis is needed. Clicking Flow Analysis on the side panel will take you to the Data Table with the detailed list of transactions that trigger that particular control point.